DY, DAIRY
MD DA950 NATIONAL DAIRY MARKET AT A GLANCE
CHICAGO MERCANTILE EXCHANGE (CME) CASH MARKETS (05/02):
BUTTER: Grade AA closed at $1.4400. The weekly average for Grade
AA is $1.4280 (+.0250).
CHEESE: Barrels closed at $1.9300 and 40# blocks at $1.9400. The
weekly average for barrels is $1.9140 (+.0420) and blocks, $1.9510
(+.0095).
BUTTER HIGHLIGHTS: The cash butter price at the CME has been
increasing, in general, since February 21. The price has gained
$0.2625 over that time period. The price has either increased or
held steady in all but 2 trading sessions over that extended
period. Churning activity remains strong for both domestic and
international needs. Churning is heavy during the week, but often
heavier on weekends when additional loads of cream are usually
available. Producers and handlers state that some domestic buyers
are purchasing heavier and moving these purchases into storage
programs with confidence that prices later in the year will make
up for the current price as well as storage costs. The reason
given for heavier purchases at this time is the uncertain impact
current international sales might have on supplies later in the
year. Current domestic butter demand is seasonally active.
Retail and restaurant orders are typical for this time of the
year, although reports indicate that current economic conditions
are starting to impact customer buying patterns at both retail and
food service outlets.
CHEESE HIGHLIGHTS: The cheese market is unsettled though
prices closed higher for the week. Most traders wonder why cheese
prices are rising while heading toward peak spring cheese
production levels. Current business remains mixed, from slow to
moderate. Some food service accounts are preparing for May events
including Mothers' Day, the largest day for dining out. Current
natural American supplies remain limited. However, most operators
will take orders for future make. Mozzarella interest is slowing
seasonally. Revised 2007 annual cheddar production was lowered to
3.057 billion pounds, down 66.7 million pounds (-2.0%) from the
revised 2006 total. Total cheese output in 2007 was reduced to
9.700 billion pounds, up 175.9 million pounds (1.8%) from 2006.
FLUID MILK: Milk production across the country is seasonally
heavy and, in most areas, continues to increase. In southern most
states from Florida across the country to Southern California,
milk handlers and processors feel that peak levels might be at
hand. Most manufacturing plants in the country are already
running at or very near capacity levels. In California, plant
intakes have moderated and this is attributed to the effects of
base plans in place. Reports indicated that less milk is being
diverted at the farm level. Processing plants have seen some
reduction in schedules from the decline in deliveries. Cream
markets are firm with prices and pricing multiples gradually
increasing. Ice cream demand is gaining momentum across the
country, absorbing increasing volumes of cream, although
sufficient volumes of cream continue to clear to local and out of
area churns.
DRY PRODUCTS: Dry product markets and prices are generally
steady this week with many market participants attended the ADPI
meeting in Chicago early in the week. Nonfat dry milk production
across the country is seasonally strong as milk volumes are heavy.
Demand is good and clearing offerings in a timely fashion.
Offerings into the future are limited. Buyers are looking for
additional product and not always finding what they would like to
have. Buttermilk powder production is seasonally active.
Churning activity is strong, thus providing increasing volumes of
buttermilk for processing. Condensed buttermilk demand is
increasing, although heavy volumes continue to clear to dryers.
Whey powder markets are steady to firm, although prices held
generally steady this week. Cheese output is seasonally strong,
thus whey volumes are correspondingly heavy. Domestic demand is
steady with reports of international sales slowing as prices move
higher and shipping costs increase.
CLASS AND COMPONENT PRICES (DAIRY PROGRAMS): The following
are the April 2008 prices under the Federal Milk Order pricing
system and the changes from March: Class II $15.29 (-$0.34),
Class III $16.76 (- $1.24), and class IV $14.56 (+$0.39). Product
price averages used in computing Class Prices are butter $1.3492,
NDM $1.2506, cheese $1.8164, and dry whey $0.2560. The Class II
butterfat price is $1.4818 and the Class III/IV butterfat price is
$1.4748.
2007 MILK PRODUCTION, DISPOSITION, AND INCOME (NASS): Milk
production increased 2.1% in 2007 to 186 billion pounds. The rate
per cow, at 20,267 pounds, was 316 pounds above 2006. The annual
average number of milk cows on farms was 9.16 million head, up
46,000 head from 2006. Cash receipts from marketings of milk
during 2007, totaled $35.4 billion, 51.4% higher than 2006.
Producer returns averaged $19.21 per hundredweight, 48.2% above
2006. Marketings totaled 184 billion pounds, 2.1% above 2006.
Marketings include whole milk sold to plants and dealers as well
as milk sold directly to consumers. An estimated 1.17 billion
pounds of milk were used on farms where produced during 2007, 1.0%
more than 2006. Calves were fed 87% of this milk, with the
remainder consumed in producer households.
ANNUAL DAIRY PRODUCTS (NASS): Butter production in the United
States during 2007 totaled 1.53 billion pounds, 5.8% above 2006.
California accounted for 32.5% of the production, followed by
Wisconsin with 24.3%. Total cheese production, excluding cottage
cheeses, was 9.70 billion pounds, 1.8% above 2006 production.
Wisconsin was the leading State with 25.3% of the production,
followed by California with 23.6% and Idaho with 8.1%. Nonfat dry
milk for human food totaled 1.30 billion pounds, up 4.4%.
California was the leading state with 55.8% of the production.
Skim milk powders totaled 202 million pounds, down 25.1%. Dry
whey for human food production, at 1.07 billion pounds, was up
0.8%. Lactose, Human and Animal production was 756 million
pounds, up 2.3%. During 2007, there were 1,109 dairy plants in
the U.S. manufacturing one or more dairy products, 15 more than in
2006.
FEBRUARY OVER-ORDER CHARGES (Dairy Programs): For February
2008, the all areas combined average over-order charge on producer
milk used in Class I was $2.23 per cwt., up $0.63 from the revised
January 2008 average. Ninety-two percent of the producer milk
used in Class I carried an over-order charge. On an individual
order basis, Class I over-order charges ranged from $0.68 in the
Pacific Northwest to $4.08 in Florida. For producer milk used in
the other three classes, the all areas combined average over-order
charges and proportions of milk carrying a charge were: for Class
II, $1.26, 86%; for Class III, $0.21, 25%; for Class IV, $0.27,
50%. The average over-order charge on producer milk used in all
classes combined for all areas combined was $1.01 and ranged from
$0.29 in the Pacific Northwest to $3.51 in Florida. Fifty-six
percent of total producer milk carried an over-order charge.
COMMERCIAL DISAPPEARANCE (ERS, AMS): Commercial
disappearance of dairy products during the period from December
2007 to February 2008 totals 46.1 billion pounds, 4.2% above the
same period in 2006/2007. Comparing disappearance levels with
year earlier levels: butter is +9.8%; American cheese, +4.2%;
other cheese, +3.7%; and fluid milk, -1.1%.
CONSUMER PRICE INDEX (BLS): The March CPI for all food is
209.4, up 4.5% from March 2007. The dairy product index is 206.2,
up 11.0% from a year ago. The following are the March to March
changes for selected products: fresh whole milk is +15.2%;
cheese, +12.5%; and fluid milk products, -2.0%.
APRIL AGRICULTURAL PRICES (NASS): The index of prices paid by
farmers for commodities and services, interest, taxes, and wage rates in April 2008
advanced 3 points to 181. Compared with April 2007, the index was up 21 points (13.1%).
The index of prices received by farmers for dairy products declined 1 point during the
month of April 2008 to 138. Compared with April 2007, the index was up 11 points
(8.7%). Prices received by farmers in April with changes from March were: for All Milk,
$18.00, down $.10; for Fluid Grade Milk, $18.00, unchanged; and for Manufacturing
Grade Milk, $17.60, down $.70.
1200c steve Schneeberger (608)250-3204
